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Tuesday, May 5, 2009

You Can Run, But You Can't Hide

Today, President Obama drew mixed responses from Congressional Democrats and Republicans over policies intended to close major tax loopholes for corporations. Basically, multinationals have been dodging taxes, legally, by using loopholes, such as the Cayman Island Scheme. Here's a website that offers assistance for tax havens, aptly titled ESCAPEARTIST.COM! Way to be obvious.

Anyway, some members of Congress, such as Max Baucus and Joseph Crowley, to name a few, are hesitant to the plan, saying that it will hurt American companies in a time when they are already suffering. Here's the problem with these kinds of arguments:

If American corporations' financial success is based on weaseling their way out paying of billions of dollars per year, they don't deserve to exist. I'm sorry. I'm not anti-business, but the rules need to be fair. This is hurting the American taxpayer (to use GOP rhetoric) and sends the message that certain companies (the ones who can take advantage of tax havens) are more deserving than others. Now, you can't exactly blame the corporations. It's legal, right? Let's close the loopholes so they can't make that decision. There's no defensible reason for keeping them. Not to mention, it's likely that they will only find new loopholes. Let's do the right thing.

Here's an excerpt from a Bloomberg article to explain a little more:

The package of corporate and individual tax changes, which will be part of a detailed budget the administration plans to release May 7, would generate about $210 billion in tax revenue over the next decade, according to Treasury estimates. Obama’s proposals, if adopted, wouldn’t take effect until 2011.

For further information, I highly recommend, once again, the book Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else by David Cay Johnston. You can get it here.